CPS loses R1.3 Billion Lawsuit Against SASSA

Cash Paymaster Services (CPS), a division of Net1 Technologies has lost yet another lawsuit after claiming an initial R1.3 billion. Judge R.M. Nugent who was appointed the arbitrator in this matter ruled in favour of SASSA in all the claims that CPS had lodged. In addition, CPS was ordered to pay all the costs of the arbitration. SASSA welcomes these well thought out awards by Honourable Nugent.

The main claim by CPS in March 2009 was that it was entitled to enrol all beneficiaries on its computerised system, irrespective of whether they were to be paid by themselves. They also claimed that SASSA was not entitled to pay grants by electronic transfer to bank accounts of beneficiaries. They further claimed that SASSA wasn’t entitled to cause grants to be paid in cash at post offices and other South African Post Office facilities, and by electronic transfer to Postbank and other bank accounts of beneficiaries, and that the SASSA was not entitled to enrol all beneficiaries on its database. CPS lost on all the three claims and were ordered to pay the costs in each case.

CPS has, during the financial years 2009/2010 and 2010/2011, initiated various claims against SASSA and had them referred to arbitration as per the provisions of the SLAs concluded with the Provincial Departments for Social Services and Welfare (Social Development), were, upon the establishment of SASSA, transferred to SASSA with effect from 1 April 2006, and were extended, remained in subsistence until 2011 when CPS was contracted as the sole service provider for the provisioning of social grant payment services.

The claims were for a total capital claim of R 1 362 429 942.00 and based on the alleged deprivation of an opportunity for CPS to earn full service fees for the period April 2006 to June 2010 as a result of the contract concluded between SASSA and certain banking institutions and SAPO for the rendering of social grant payment services; which CPS claimed to be constituting a breach of its exclusive rights to render the services in respect of the provinces that it serviced (Eastern Cape (rural areas), KwaZulu Natal, Limpopo; North West and Northern Cape). 

The contract between SASSA and CPS has a history of litigation brought by CPS in an effort to amass maximum and in many cases, unreasonable financial benefit. In this case CPS attempted to monopolise the payment of grants and shut SAPO and other commercial banks out. The fiscus has been saved a whooping R1.3 billion and we are of the belief that this money will be put to good use by the State which needs every cent in these financially trying times.

Issued on behalf of SASSA, 19 June 2019